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Friday, March 29, 2013

Why is Online Poker illegal?

Well, the Federal Government (and state governments that have separate legislation) tells us a story about consumer protection (just look at the funds that various poker sites have embezzled from their customers), and protection against money laundering. 

Realistically, it has more to do with the Fed not getting their cut.  Money laundering is the process by which money earned illegally is 'washed' and becomes part of the white market economy.  This happens in other areas in various ways, most having to do with front businesses providing legitimate services, but perhaps falsifying records in various ways.  Basically, find a way to pay taxes on money you earned selling drugs, and it becomes legal.  Online Gambling allowed people to launder money without paying taxes to the federal government (or state governments, for that matter).  As we know from various bumper stickers and t-shirts, the government hates competition.  It worked harder and faster to shut down online poker as a viable way to both earn untaxed income and launder money than it has on many other organized crime organizations that use more conventional laundering routes. Evidence: the continued existence of the Italian Mafia for well over 100 years as a criminal presence in the U.S.  As long as those more conventional routes involve paying taxes as part of their laundering process, why bother? 

Currently,  Washington State is working on legislation to regulate online poker, so that those wishing to run poker sites allowing online gambling sites catering to  players in that state will be required to have a physical location in Washington according to  This means the business will have to pay taxes, and keep U.S. based records on the financial activities of its customers.  This doesn't prevent those players from laundering money, necessarily (although admittedly it makes it a bit harder), it just makes it so those laundering money have to pay taxes on that money (just like those gambling in a regular casino with large amounts of money). 

While it's nice for those of us that like to play poker online with legitimately earned income, it's yet another example of those in power using that power to make sure they're getting the money they so richly 'deserve.'   It's also another example of the government further regulating the internet as a whole, which, in my opinion, generally means less freedom and more ability to control a population. 

Oh well, it could be worse, I mean, North Korea could invade or something.....


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